“Did you see the latest Airtel ad?”
“The mobile one?”
“No, the other one?”
“You mean landline?”
“No, damn it, the new Airtel ad.”
“Broadband?”
“You moron, I meant the new Airtel ad. The one for DTH.”
“WHAT? You mean, Airtel and Direct-to-Home?”
Surprise, surprise, Airtel – the brand that moved into mobiles, lengthened itself into landline and broadened into broadband is now extending itself into DTH. On second thoughts, after seeing many of its first and second cousins extending their brands, maybe it shouldn’t surprise anyone.
Not, definitely me! Brand extensions have ceased to irritate me any longer. Not that I am buying into it any more. Just that I have given up all hopes of finding a half-decent, common-sense filled MBA who realizes the folly of extensions and avoids it like a plague.
Somebody please tell me, the logic of this Airtel extension.
They are all in telecommunications, you say? Just because there is one ministry that handles all the four products – mobile, landline, broadband and DTH – is no reason the consumer sees it together.
Telecommunications has ceased to mean anything specific any more. When consumers want a phone that they can carry, they simply call it a ‘mobile’. When the want a phone at home, they call it a ‘telephone’. When they want to get connected to the Internet they call it ‘broadband’. And when they want to watch TV with their own dish, they simply call it ‘DTH’. Four separate categories; four separate needs. Hence, a need for four separate brands.
Agreed Airtel has been a stupendous success so far. But that is because their competitors are all extended. Indicom, Reliance, BSNL et al are all three – landline, mobile and broadband. Vodaphone is only into mobiles, but they have been changing their names and colours more often than their brand managers have been changing their shirts. And hence, it trails Airtel.
But, so is the DTH segment. All the key brands are extended. Tatasky is an extension – a brand that means salt at one end and automobiles on the other. Sun Direct is an extension – worse, Sun means South Indian channel. No wonder, it sells, if at all it does, only in the South. DD Direct is an extension – and a Government brand, killing whatever chances it might have had of survival.
That leaves Dish TV - the only specialist brand in the DTH segment. Agreed, it has been promoted by Zee, but it doesn’t have it in its brand name. I expect Dish to lead the pack for sometime to come.
Dish TV is already a leader. And by extending themselves, its competitors have ensured Dish stays that way - a leader, for some time to come!
29 comments:
Beautiful article! I loved it.... I almost agree with you but then come to think of it...Airtel might win in the long run...They are into mobiles, landlines, broadband and now DTH..So a customer might just take an Airtel landline, mobile, have an Airtel broadband and see TV via Airtel's services! That might just turn out economical for the customer...Don't you think? Then to take a BSNL landline, an Airtel mobile, a Dish TV and a Tata Indicom internet...
And its good to see you back :) It really is!
Though we have physicians, we always prefer specialists.
consumers always prefer variety,
if not cmpnies wnt be losing their sleep in making them brand loyal
...DTH is de new craze nwdayz.why i dnt knw..?
frget other players...Even the market leader DISH TV is losing close to 1000cr a year..
..i wnt b surprised if dey r nt able to break even for the next 10 years..
....nd ya ..de new entrant videocon...
..wen dey cudnt do nytng to LG in consumer durables inspite of FMA,
they r tryng dere luck here..
...Even de worlds best DTH markets like US nd UK have no more dan 2 players..
....i blive a major consolidation will happen in near future..
.we mite have a kingfisher/deccan, jet/sahara in de offing..
“Brand extensions have ceased to irritate me any longer” – the very notion of brand extension irritating someone is preposterous, forget about the fact how long or to what extent it does to one.
Let be post a hypothetical question to you. You start a company which manufactures soap, say soap rather than soaps. Is it possible to sustain you organization with just one product or one brand? Will you not want to increase and extend your reach into various segments of the market? Expand you product portfolio?
While I am awaiting your reply I shall post my comment on your Airtel blog.
Airtel is not extending its product to different categories not because they are under same ministry, for all you know ministry has nothing to do with any brand extension of any organization, what so ever.
Yes they are telecommunication in its purest form, while you are aware of the fact that telecommunication means ‘long-distance communication’ and it is exactly the reason why the ministry is called so, while mobile, broadband, landline and DTH are forms of telecommunication.
Airtel has not extended to DTH not because its competitor extended into DTH, I am sure it is not the core reason though it might have an effect. Bharthi is the parent company here, Airtel is its brand, Bharthi enterprises is a telecommunication player and they have all the expertise to get develop and introduce telecommunication products.
The logic behind Bharthi introducing is that, one they have the expertise; two they can very well use the existing distribution network and other essential resource.
Let me give you an update on the technology aspect of telecommunication. In the near future and it is not an ambiguity, there will be just one cable that will come into you house through which one can avail the landline, broadband and DTH service, all in one cable. So considering the fact that the technology has already been developed in it is a matter of introduction to the market. I would say Airtel has taken the best move, so does TATA Indicom, Reliance or any XYZ company.
Irudhaya raj, here are my replies to your comments. One, nobody is asking a company to not launch new brands. Definitely not me. All I am asking them is not to launch new brands with the same old name. Launch new brands with new names is what I am saying. Second, while thanking you for you enlightening technology update, that still doesn't make it right to name all the products under a single brand name. There is only road on which many automobiles - 2, 3, 4 and more wheelers - are driven. That is no reason for naming all the brands with the same name! Can you seriously think of Bajaj launching a Bajaj car just because it is going to be driven in the same road its bikes have all along been driven!
Irudhaya raj, here are my replies to your comments. One, nobody is asking a company to not launch new brands. Definitely not me. All I am asking them is not to launch new brands with the same old name. Launch new brands with new names is what I am saying. Second, while thanking you for you enlightening technology update, that still doesn't make it right to name all the products under a single brand name. There is only road on which many automobiles - 2, 3, 4 and more wheelers - are driven. That is no reason for naming all the brands with the same name! Can you seriously think of Bajaj launching a Bajaj car just because it is going to be driven in the same road its bikes have all along been driven!
The concept of naming a brand extension or launching an extended brand is a subjective matter which has its root to the implication and the suitability and the relevance of the name to its product. There is no hard and fast rule saying that one should launch a new product with a different brand name, as long as the relevance holds good its ok to carry the name. For example consider Maggie noodles for an example, while the rice flavour and the chicken flavour are the extension of the good old maggie noddles its should be extended to with the same name because one doesn't to spend on marketing a new product while the name of the existing product holds good. And the money one could save here is in this case is considerable.
As said above, launching flavours of maggi is not brand extension bt it s line extension..which s perfectly correct.for e.g.tmrw maggi comes up with maggi toothpaste, then its called brand extension...
Tushar - I would like to correct you here, I agree the point that Maggie example is a depiction of line extension, yet it is a brand-extension. line extension is simply a form of brand extension. Brand Extension has many forms of which the two broadest forms are line and category extension. There are other forms yet the most prominent one are those I mentioned above. So to say if only Maggie comes up with a toothpaste its called brand extension is not correct. Maggie flavours are brand extension in one form and if they come up with toothpaste its another form of brand extension, the base line is it is a brand extension.
And I have not come up with my own story here please refer the book called Strategic Brand Management by Kevin Lane Keller
மதிப்புக்குரிய சதீஷ் கிருஷ்ணமுர்த்தி அய்யா அவர்களே..தங்களின் இந்த படைப்பு மிக அற்புதம்..
Nokia
What is known today as Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of the Tammerkoski rapids in the town of Tampere, in south-western Finland.
Until 1967 Nokia was manufacturing and recycling paper. But today, it is the world’s largest handset manufacturer
SIEMENS
The $ 110.82 bn German giant, which was manufacturing engineering equipments for industrial purposes, had diversified its business into telecommunications, transportation, Control Systems, Healthcare, marine engineering and so on. It is competitive in almost all the above said industries.
Samsung
We all know Samsung as a Korean Consumer Electronics company. However,
• Samsung constructed Tower 1 of the Petronas Twin Towers in Kuala Lampur, Malaysia, the world's tallest twin buildings.
• Samsung is constructing the world's tallest building, the Burj Dubai in the UAE.
• Samsung constructed the Taipei 101 in Taiwan, the world's tallest completed skyscraper.
TATA
• Tata Steel
• Tata Consultancy Services
• Tata Motors
• Tata communications
• TATA Sky
In all the above brands the company prefixes the name “Tata” and they all are success.
I agree that Airtel's DTH TVC (Television Commercial) featuring Madhavan, ARR, Kareena.......is horrible.
In fact, I could not decipher anything from the ad.
I also felt that they are entering this field very late.
May be they are trying to carry forward the brand's success in telecom and internet than to experiment with a new name.
The ad shows that bharti is trying all it can to promote its dth. Also I think that "Airtel" has a better brand recall than "Bharti" itself.
Lets hope at least their retail chain is not being named as "AIRTEL-MART"
or "WAL-AIRTEL"
After reading this wonderful article i just remember one law under the book "22 immutable laws of branding" i.e, A brand becomes stronger when you narrow its focus... I just request all out there who commented on this article to go look at that law. i think its law no 2.. Only If there is a need you proceed with it.Do what your consumers want rather than doing what increases your wealth. Its better to stay idle instead of entering as 3rd or 4th player for the same product in category.I worked in Airtel for few months and i know how they go on forming strategies. First of all they don't have any separate division deals with DTH services.Its the people who are into Mobile services taking care of DTH too... If they keep on diversifying the products and jobs of the employees, damn sure the future will go worse.. For example, I have seen at least 36 customers visiting Airtel office in Prince towers everyday having complaints on BLACKBERRY provided by Airtel. Even i saw the way they treat the custoemrs and conflicts arise because of them...if this is the scenario prevailing then who asked for DTH .. Is it you or me?? I go with professor point that "And when they want to watch TV with their own dish, they simply call it ‘DTH’". That's true. Realization of profits should not be the only motto of any company that too standing as a no.1 Mobile service provider with a very large customer base.
When we are asked to do a market research of Airtel Prepaid,postpaid and visibility tracking by the Brand, we guys have came out with several suggestions and recommendations which they have not even thought of before.. "Airtel Customer service head and VP said this to us"..So i completely disagree to all your comments..
I think its Law no 5 - " The Law of Focus" where it demands that we explain our product in one word.
I agree with the 22 laws by Ries and Jack. However, I couldn't digest how some brands like Sony, Hitachi, Tata, Siemens, etc are able to survive .. .
Are they law breakers then ?
For example the brand "Sony" is so powerful in the following:
1. Camcorder - "Handycam"
2. Gaming - " PS2","PS3","PSP"
3. digicam - "cybershot"
4. mobile phones - " sonyericsson"
5. televisioin - "Bravia, Wega"
6. laptop(PC) - "VAIO"
or you can even see a brand like "PHILIPS"
Motorola is also into the business of manufacturing settop boxes in U.S.A and Europe.(http://broadband.motorola.com/consumers/home_entertainment.asp)
In fact, not very often we associate motorola with CAR Radios
which used to be its initial business.
How are these people able to survive and excel then ???
Sir,
The debate on brand extension never seem to end on your blog, as David commented, we should accept that there are some brands which really seem to be doing well in two or more categories.
Why shouldn't we agree that brand extensions if well concieved and executed can still be a great success?
Anonymous and others, I think we have gone through this issue before. I mean the success of brands like Sony, Samsung etc., who have extended and still succeeded. These brands have succeeded because all their competitors have extended themselves. Sony, Samsung, Sanyo, Philips and many more. If you can go back to my old posts I have talked about this. Brand extension succeeds - and succeeds only - under three scenarios. One, when there is no competition in the extended category. Two, when every other competitor is extended (Like Sony, LG, Samsung etc.,). And three, when the brand that extends is very old and enjoys strong pedigree and even stronger heritage (Like Tata). I rest my case. Let's not extend (pun intended) this issue further (at least not for now!).
Hai sir,
This is the first time i got an oppurtunity to see your blog.comming to the topic,
wats your comment about Kingfisher airlines and beer.
Hi premkumar, I wonder why Kingfisher wanted to launch an airline. Five bottles and you would be flying anyway! On a serious note, it's an extension that would fail. Either the airline will or the beer would. Soon enough.
Thats a nice comment sir. "Five bottles and you would be flying anyway!"
I too feel that the KF is much of an exaggeration. Even a couple of months before there were talks between Mallya and Naresh Goyal of Jet about a possible merger. This goes about to show how weak a brand can be.
Whether it flies high or not sooner it will fly off.
Today, while watching the 2nd India-SriLanka ODI, I was horrified to see an Ad which said, guess what?, Nirma Salt !!!! My mother, whose knowledge of brand management is minimal, was the first to respond with, "Who will buy that?" I am surprised at the sheer audacity (or brainlessness) of Nirma Brand managers. If they manage to sell any decent amounts of the salt, I guess they will be eligible for a Nobel prize.... What's your take on the detergent-salt, Sir?
Hi Mayan, you said it right. And so is your mom. Any brand manager worth his salt wouldn't do a mistake like this. What next? Rin Atta, Surf ketchup and Ariel masala!
I wouldn't agree with you on this point..!! Well if you see in Canada, they have a 125 year old company called as Bell Canada which wa initially into telephone or they call it homephone services. Now they have Internet, DTH, Homephones, and what not..So if it would work for them y not airtel???
Hi Rajalakshmi, does Canada Bell have competition? If they do, are those brands extended as well?
Yes. Bell Canada's biggest competitor is Roger's communication which also has extended their services to Cable TV, Wireless, Telecommunications,
Publishing, Broadcasting. They also compete with Bell Canada with some of the best packages.
Hi Rajalakshmi, if you can, read my previous posts on Brand Extensions. I have talked about the three exceptions when extensions could succeed: One, if there is no competition in the extended category. Second, if all competing brands are extended too (which is the case with your example). Three, when the extended brand has a long and trusted pedigree (like Tata).
Thanks for clarifying my doubt!!:-)
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